GURGAON, India (Aug. 15, 2008) Apollo Tyres Ltd. has withdrawn its application to build a tire plant in Gyongyos, Hungary, and is starting a search for a new site in Europe, possibly still in Hungary.
Apollo cited "unexpected delays in administrative processes" and a "potentially divisive referendum" in the local community for its decision to look elsewhere for its $300 million project.
Apollo had announced its choice of Gyongyos in January, at which time company officials indicated the plant could be on stream by as early as mid-2009.
At the same time, Apollo Tyres is requesting the Hungarian Investment and Trade Development Agency identify alternative locations for the plant, which will have an annual capacity of up to 7 million units and employ up to 1,000. Simultaneously, Apollo is exploring suitable alternative locations elsewhere in Europe.
After announcing the site and setting up a Hungarian subsidiary to oversee the firm's interests there, Apollo was confronted with a local initiative to block its investment via a local referendum.
While Apollo acknowledges this decision might have a short-term financial and resource allocation impact, the company said it remains committed to producing tires in Europe.